Two million low-paid workers could be in line for statutory sick pay for the first time, following government plans to reduce ill health-related job losses.

Ministers are looking into whether to extend statutory sick pay (SSP) in a bid to reduce the number of workers leaving their jobs after falling ill or having an accident. The government has launched a consultation on the proposals, although it is as yet unclear how many ‘gig economy’ workers will be helped by the reforms.

At the moment, employees must earn at least the equivalent of 14 hours on the minimum wage - £118 a week - to qualify for SSP. The government is now considering whether to extend eligibility to those earning below this threshold, as well as offering more help for those returning to work after sick leave.

Critics say that people with disabilities and chronic conditions, such as MS and cancer,  find the current system inflexible and often struggle to arrange a phased return to work with their employer. Health Secretary Matt Hancock said: "We need to remove the barriers that stop people with disabilities or health conditions from reaching their full potential - these steps will help us achieve that."

To qualify for SSP, you must be classed as an employee or an agency worker and you need to have been ill for at least four consecutive days. More than one million people in the UK are considered to be gig economy workers, receiving little or no holiday or sick pay from their employers. The Department for Work and Pensions said the proposals would cover gig workers on freelance or short-term contracts if they meet certain criteria. 

According to the government, more than 100,000 people leave their job each year following an illness lasting at least four weeks. SSP is £94.25 a week, while workers may also receive more if their employer has a company sick pay scheme. The maximum length of time SSP can be claimed is 28 weeks. 

Many people who have to take a prolonged time off work following an illness or injury find themselves faced with an income shortfall, due to the relatively low level of SSP. Income protection insurance, which gives a tax-free, monthly income should you be unable to work for a spell, can be a good way of meeting the mortgage or rent and paying the bills until you return to work.

There are a number of types of income protection, including accident and sickness insurance and even loan protection insurance. Policyholders can opt for short term income protection, which provides cover for around six to 12 months, and long term income protection, which offers cover in the event of you being unlikely to work again.

Last year, shocking research revealed that 17m adults in the UK - one in three of us - would be unable to recover quickly from a financial shock or setback. The Cost of Resilience report from Zurich UK showed that nearly a quarter (24%) of Brits have no savings to fall back on and that 26% do not feel in control of their finances. 

Under the proposals, the government is considering allowing phased returns to work, in which employees would continue to receive SSP. There could also be a rebate for small businesses who help employees return, while staff could also be given the right to request modifications to working patterns to help them back to work.

The consultation ends on October 7 and anyone interested in having their say can access the online survey here.